Enhancement on issue which was never part of reasons recorded for reopening the assessment in not valid
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Case Details: |
Harendra Singh Vs. ITO |
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Appeal No.: |
ITA No. 1318/Del/2018 |
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Assessment Year: |
2009-10 |
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Order Pronounced by: |
ITAT Delhi |
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Order Date: |
27-11-2020 |
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In Favour of: |
Assessee |
Brief Facts:
- The appellant is a resident of Meerut and has been filing his return from the same address before ITO, Ward 1(3), Meerut, Ghaziabad. On the basis of AIR information regarding purchase of property worth Rs. 36.24 Lakhs, The ITO, Ward 1(3), Ghaziabad initiated reassessment proceedings.
- All the notices and intimations were issued to the address at Village Joya, Modi Nagar which was mentioned in the transfer deed of the property. Since, all the notices were served at this address where the assessee was not residing, he could not respond to the notices and the assessment was framed ex-parte u/s 144/147 of the Act for purchase of property Rs. 36.24 Lakhs.
- No property was actually purchased during the year under consideration and the assessee has in fact sold some property in the year under consideration.
- The CIT(A) made addition for capital gain of Rs. 14.74 Lakhs on sale of property and thereby deleting the addition made by the AO amounting to Rs. 36.24 Lakhs.
Submission by the assessee:
- The entire assessment was reopened on the basis of AIR information regarding purchase of property which actually never took place so the addition made by AO was deleted by the CIT (A).
- CIT (A) has no power to enhance the assessment on an altogether different issue which was never there in the reasons recorded for reopening the assessment.
Submission by Department:
- The powers of the CIT (A) are coterminous to that of the AO and hence, the enhancement is lawful.
ITAT Observations:
- The assessee has been filing his return of income in Meerut. We also find that the address in the PAN card is also that of Meerut. We fail to understand how the AO of Ghaziabad assumed jurisdiction to reopen the assessment.
- Assuming, yet not accepting, that the notice of reassessment issued was lawful yet the information was in respect of purchase of a property, whereas no such property was even purchased by the assessee.
ITAT Verdict:
- The CIT (A) exceeded his jurisdiction in making the enhancement on an issue which was never there in the reasons recorded for opening the assessment. Therefore, the enhancement done by the CIT (A) is bad in law
- Also, the notice of reassessment issued by the AO, Ghaziabad is bad in law.
- Accordingly, we set aside the assessment and quash the same.
